We are seeing more and more investment funds profiting from growth in the health and wellbeing sector. These can be funds that include this sector within sustainability themes, as well as more generalist health funds. Alliance Trust and Wheb are two retail fund managers that include this sector as one of their themes. Pictet Health is an example of one which takes a wider view with regards the health sector. These, like many other funds, could be included within your pension or ISA pot.

So why is this area becoming a good bet as far as investment is concerned? Well I thought it would be fun to take a look at a particular area in the wellbeing sector: cycling. As a cyclist I am astounded by the number of people who are regularly out on my local roads at weekends. It’s worth looking at the statistics: figures are showing that more people are cycling.

This has had a positive impact on the global bicycle industry. In 2014, this was valued at U$51 billion and is forecasted to grow by 3.5 per cent per annum compound compared with 1.9 per cent for global golf equipment. More significantly from a profit angle, according to Reuters, about a third of cyclists have household incomes over $100,000, an increase of 63 per cent from 10 years ago. This is particularly benefitting companies focusing on the mid- and high-end of the market where people are prepared to pay extra for quality.

Companies like Shimano, for example. If many of you look at your brake or gear components you may well come across their name. Based in Japan, they actually manufacture components for the bicycle, fishing and rowing industries and have experienced very healthy net sales and profits over a number of years. Shimano is a stock currently held in the Web Fund, and one that is currently under the radar of Alliance Trust.

There are also good prospects for the more traditional health sector, which is benefitting from an ever-ageing and urbanised population. Funds like Picket Health are investing in companies that they feel add value to the health system. While not being categorised under the socially responsible/ethical sector, it does set as one of its four investment principles ‘quality of life’.

According to Picket the health theme has been one of the better performing segments in the equity market over the last few years. This is due to a number of reasons, including improved fundamental value arising out of revolutionary therapies hitting the market together with technology that is helping to reduce the cost of healthcare.

Interestingly, many in the industry now perceive health and wellbeing to be a solid defensive stock in times of market turmoil. In many ways it has replaced some of those sin sectors, such as tobacco, which in the past have been perceived as being robust in all seasons.

It is not just investment products that benefit from good health. Good old- fashioned insurance products are also getting involved. Vitality is a relatively new life assurance provider in the market.

It takes a unique stance in that it rewards policyholders for pursuing a healthy lifestyle. This can take the form of reduction in future premiums as well as discounts with a number of business partners, such as sport and health retailers. In order to achieve these rewards policyholders record their healthy activities, which helps them achieve certain status levels.

Other than benefitting the individual, Vitality argues that it ultimately will improve its insurance book in the future, which will ultimately mean more competitive premiums for everyone in the future. It could also be argued that it is promoting good health to society as a whole and helping to reduce the cost burden on the health system.

To sum up, as long as we are all trying to get healthier this sector offers good investment prospects for the future.

Richard Essex is an adviser with Grayside Ltd, a member of the Ethical Investment Association. He is the author of ‘Invest, Feel Good, Make a Difference’.